Obamacare can be confusing -- especially now that the president has told the states that it's up to them to decide whether to let insurers continue tothat don't meet the standards set by federal health reform.
In fact, just trying to sort out the plans and subsidies offered on, the federal marketplace, can be a challenge.
The antidote to confusion: information. At least that's one of the conclusions of aby New Jersey Policy Perspective, a liberal-leaning think tank.
The report's author, Raymond J. Castro, argues that New Jersey officials should take a more active role guaranteeing that consumers are aware of their insurance options and rights. And that role should not be limited to the online federal marketplace, but should be a comprehensive outreach program.
This position reinforces a point that advocates for expanding insurance access have been making for several months: The state should spend the $7.6 million in federal funding it’s received to educate consumers about the choices they face and the smartest decisions they can make.
Right now, though, state and federal officials have been negotiating how the money would be spent or whether it would be returned to the federal government.
Outreach is essential, according to consumer advocates, because the options for people who buy individual or family plans are changing radically on January 1, when insurance purchased through the federal marketplace goes into effect.
The marketplace, a central feature of the 2010 Affordable Care Act, is intended to be a one-stop shop for residents to purchase insurance and learn if they’re eligible for tax credits to subsidize the purchase.
“The entire purpose of [the state Department of Banking and Insurance] is to balance the self-interest of the free market with the real needs of consumers,” Castro wrote, adding that the state should “guarantee that consumers are aware of all their insurance options and rights -- and do so in close cooperation with the federal government and the insurance industry.”
The report also calls for the state to contribute its own subsidies to help make insurance more affordable, a prospect that seems remote as Gov. Chris Christie and the Legislature grapple with closing the state’s.
But just how complicated are the available options?
Consider someone who wants to keep her barebones plan that doesn't comply with the ACA. She would have to apply for an early renewal before the end of the month, which would enable her to stick with her current coverage until December 2014.
That December 31 deadline is significant. Barebones plans -- such as those that
do not comply with the ACA, which becomes the law of the land on January 1.
“Our barebones policies are so bad that they don’t pass the Obama administration test for an extension,” said Castro.
The NJPP report also points out a potential problem with policyholders keeping their barebones plans: If too many young, healthy residents opt to do so, it could lead to spiraling cost increases that could undermine the new health insurance market in the state.
“You need those healthier people in the marketplace to sort of balance those who are sicker,” Castro said.
It's not just barebones plans that can be confusing, however.
Insurers that offer individual and small-group plans will decide in the coming weeks whether they will continue to offer more comprehensive coverage that residents currently hold.
Horizon Blue Cross Blue Shield of New Jersey and AmeriHealth New Jersey -- the two insurers in this market -- had already decided to terminate these plans.
But the Christie administration decided to.
Castro’s call for public outreach and his recommendation that the state should help subsidize insurance purchases drew the support of New Jersey for Health Care, a coalition of groups that support expanding healthcare access.
Coalition members were also critical of what they described as Christie’s “passivity” in declining to have a state-operated insurance exchange, leaving the task to the federal government.
“We should not be alone in doing this,” said Maura Collinsgru, health policy advocate for New Jersey Citizen Action, a coalition of nonprofits that are publicizing the federal marketplace.
“The governor and the administration and the insurers should be informing consumers that they have choices,” Collinsgru added.
Earlier this week, Christie repeated his position that it would have been wrong to have a state exchange. He has cited as his reason a lack of details from the federal government about the potential costs to the state.
The report also called on the state government to use the hundreds of millions of dollars in savings from expanding Medicaid to add to the federal subsidies.
The Medicaid expansion is saving the state money because the federal government will begin to pay 100 percent of Medicaid costs for adults who currently enrolled in the program. The state and federal government currently split these costs.
The proposal to use the Medicaid savings to subsidize insurance purchases seems unlikely to draw Christie’s support, considering his negative stance toward the ACA and the budgetary challenges he faces.